On top of that, you can outsource your own job, take up another one, and outsource it too. Basically you can be making way more than you currently are. I think there was a/. story on this a while back.

It's not that funny. I did this and got two promotions! My old job became the jobs of 3 guys in Taiwan, and I was their boss. Then I gave my _new_ job to another couple guys in Taiwan; and got hired in a different company to help build a team overseas.

On top of that, you can outsource your own job, take up another one, and outsource it too. Basically you can be making way more than you currently are. I think there was a/. story on this a while back.

Well I for one very much appreciate tax breaks for the poor. When are we going to get a candidate who runs on the platform of eliminating completely all income taxes on anyone who makes less than $40,000 year, while somewhat raising taxes on anyone who makes between 40K and 100K and signifantly raising taxes on anyone who dares to make more than 100K/year.

Also, lets repeal that stupid gas tax. That's about as regressive as they come and our highways and byways are just fine the way they are.

Right, because we shouldn't be charging the people that use the roads to maintain them. Believe it or not, roads tend to degrade over time, as well as require more use. Our highways and byways are not fine the way they are. In Missouri, among other places, traffic is increasing so that in some places having a two or four lane road is insufficient. Also no matter where you are, you'll get potholes and cracks that need to be fixed.
I just don't see how it's regressive to tax gas. It's just like the electric company charging more than the electricity actually costs so that they can maintain the power lines and generators.

Everything you utiize EVERY DAY is paid for by all of us collectively to give you the opportunity to drive to work and make a living. Your argument is the quintessential reduction of what is wrong with libertarian philosopy -- what was ultimately wrong with my favorite philosopher, Heinelin's, line of reasoning -- the idea that the individual alone is responsible for and should be the sole beneficiary of his labors. Even Heinlein understood that no man existed as an island -- "Conventry" should be the example here, not the silly far-rightism of his later years -- and that every aspect of your existence as the lone hero is dependent on the close cooperation and contributed taxes of those who maintain your universe. Semantic nonsense: "penailized" for making money. You're putting money into the kitty for the society and the world which makes it possible for you to get out of bed alive every day.

The sad thing is that this concept resonates so well amongst Americans. It's why we're drowning in Federal debt payments, paying the highest health prices in the world and getting worse care than those paying half what we do elsewhere, and killing our public school systems -- which will ultimately reduce us to a joke among nations, broke, sickly, and fucking stupid.

We're not asking to "punish the rich." We're simply asking that the tax burden be shifted away from those with the least ability to pay. I recognize that business success isn't an evil, and the goal isn't to tax successful people out of existence. The goal is simply to provide the government with the money it needs to operate, without putting the hurt on the lower middle class.

One misconception you seem to have is that somebody might avoid making more money for fear of being pushed into a higher tax bracket. That's not the way our current tax system works. If you make $36,900 or less, you are taxed at the lowest rate of 15%. The next higher rate is 28%, but if you make $36,901, only $1 of income is taxed at the 28% mark, with the rest being taxed at the lower rate. So at no point does anyone have to fear that an increase in earnings will lead to a reduction in actual take home pay.

I've never gotten this "disincentive to produce" thing. Who wouldn't rather have 60% of $10,000,000 a year than 85% of $30,000/year? But the way blowhards like Rush Limbaugh and Bill O'Reilly talk, you would think that if the tax rate is brought back up to pre-Bush levels for the top 2% of earners, they're just going to have to close up shop and start collecting welfare checks.

If I were in charge, I would add a new tax bracket: 100% tax on every dollar over $100M. The people affected would still have plenty of money to buy Lear jets and politicians.

Stockman, the economist who fronted supply side economics for the Reagan White House, later recanted his entire justification for the tax cuts. He said there had been no justification for the cuts other than paying back Reagan's supporters. Period. It was a con. The numbers were a sham.

And it did not work, unless you think charging up 4 trillion in debt on a credit card to finance a "boom" is success. Any dingo can be rich for a few years if he doesn't pay cash for his binges.

Reagan was lucky. As is true today, our economy depends entirely on the price of oil, and in 1982, OPEC's iron control of crude prices collapsed, removing the true cause of our national malaise since 1973 -- high oil prices. In SPITE of Reagan's catastrophic spending and tax cut combination, we got to keep enough of our national wealth in-country to enable a magnificent boom.

Today, oil prices are rising because there is no way to increase oil production worldwide to keep up with the growth in demand by asia and the US combined. There is no spare capacity. It's three decades too late to switch to alternative sources. We're screwed. There will be no Bush miracle. Bush assumes that Reagan's cuts caused the 80's boom -- this is why he was a C student -- and he is still ideologically unable to figure out that his assumption is wrong. He's supply-siding us into the grave. His only hope will be a Kerry victory, for his supporters can then blame the successor for the back-ended fiscal disaster caused by Genius Boy.

In a way, I hope Kerry loses. Then the Reaganauts, Cheney and Rice and Bush, will finally, after all these decades, have to face the steaming pile of dung they've created with no one else to blame. Okay, maybe Iran.

Oh yes, it does... Labour force is a very limited resource, so with outsourcing those low-grade jobs, you have more people who can concentrate on doing the more profitable (ie. higher added value) jobs. The trick is doing that right and not outsourcing _everything_.

Oh yes, it does... Labour force is a very limited resource, so with outsourcing those low-grade jobs, you have more people who can concentrate on doing the more profitable (ie. higher added value) jobs.

Wait, so you're saying that if we fire people they'll go find better jobs.

I'm sorry, it still doesn't make any sense. If there really were better jobs, people would already have them.

If there really were better jobs, people would already have them The higher paying jobs don't exist yet. In the 80s when electronic manufacturing jobs were outsourced, it freed up capital and intellectual resources to pursue activities that used the more cheaply made components (software, networking, etc).As software becomes cheaper it is reasonable to expect people to find ways to better utilize that software, thus creating new industries and expanding existing ones.

That's the thing. In the past there was always a "next big thing" to hop onto. However, as commentator Cringley[*] has also pointed out, the next big thing is late this time.

Also, factory workers have generally not found "higher paying" jobs to replace those they lost. They usually move into the service sector, such as cash register clerks. Maybe offshoring creates jobs for OTHER industries, but not theirs. If it didn't help factory workers, why should it help IT workers?

I'd like to believe you but I don't think it works this way.Suppose we can specify a software product to be produced. UML models, use cases etc. Now we can give that to a programmer and they can produce the actual product. The programmer doesn't need to know much about the actual business issues, just follow the spec, so we can get the cheapest programmer from the other side of the world who is capable of following the spec.

So there are fewer low level programming jobs in the US, great lets all become software architects, we are freed from the low level work and have higher valued jobs, Yippee a promotion.

Except you realise that you don't actually need as many software architects a you had programmers, and not all programmers are capable of becoming software architects, so we keep the best few and drop the rest.

A problem arises in a few years, where do you find good software architects. Usually you might start out as a programmer and after a few years experience on the job you can understand all the issues to take on the greater challenge. Well how do you get those years of experience if all the low level jobs have been shipped overseas?

The only people qualified to be software architects are the supposed low level programmers you outsourced the work to. Except now they have enough money to set up their own development shops and can undercut your business in providing software development services.

This has already happened with Clothing and Electronics, it could easily happen with software too.

The only jobs that remain here are those that require an on-site presence, cleaning, maintenance, services, shopping and the management who sent the jobs abroad.

Yes, it's the logical conclusion and would be the eventual result: the republican heaven where no-one works but lives off their company stock. Of course, at some point a wall will be hit and this will never be realized. Instead, a part of the nation will continue doing the high-level management jobs and the rest will work in the service sector (retail of all sorts) that has to be done locally.

It's all pretty sad, but hey, if you're one of the high-level managers, why would you care?

Er, the article does not define those fields in any terms nor does it take into account other factors -for example, the fact that 'programming' jobs were lost and 'engineering' jobs gained falls prey to a basic logical flaw: correlation is not causality. By your (or her) interpretation, these jobs were created because the 'lesser' ones were lost, a claim which is patently absurd -the 'good' jobs rely on the 'bad' ones and there would have been the demand anyway. The actual stats were that 71000 'bad' jobs were lost and 11500 'good' ones gained.

A more logical assertion would be that without outsourcing, instead of having gained (again, dubitable) 11500 - 71000 = 40500 jobs, we would have gained 71000 + 11500 = 186000 jobs. (Yes, I'm aware that it's not that simple but my assertion is realistically more accurate.)

Dissecting the article a bit:

It may come as a surprise, but global sourcing in the 1990s, by reducing the price of IT hardware, yielded increased investment in IT and more jobs for U.S. workers with IT skills.

Nice spin. One has to have read Orwell's 'Dictionary' for this one. The fact, of course, is that IT jobs increased because there was more IT to go around. Her causality is (intentionally) skewed.

The value to the U.S. economy of cheaper outsourced software and IT services is that it reduces the price of customized software. Econometric estimates are that, to an even greater degree than IT hardware, demand for software and services increases more than one-for-one with reductions in price. Therefore, as prices fall, demand for services and software rises more than one-for-one, diffusing IT into the lagging sectors and deepening the use of IT in the leading sectors, thus increasing demand for workers with IT skills in all sectors.

This is what is known as an assertion. Realistically, there is nothing that indicates that these potential jobs, too, couldn't be outsourced -quite the contrary: the capitalist principle of maximising profit is a strong argument for outsourcing, one that she has not one of a comparable magnitude for.

This isn't that complicated.I am a custom programmer, I bill $50/hr.I get lots of work, I hire someone to help me.I pay them less then I charge, I make money on their work as well as mine.I provide the work to them, and supervise, this is how I justify my cut.This is how many small business grow, it is called organic growth, and is very common.

Since programmers don't need to be physically close, why not hire the cheapest capable person? If you only pay $10/hr, you make $40/their hour, of course minus your

"Since programmers don't need to be physically close, why not hire the cheapest capable person? If you only pay $10/hr, you make $40/their hour, of course minus your management work."

Works fine until people wonder why they're paying the middleman $50 at all when they can turn around and hire the $10/hour worker directly. And that is exactly the situation here.

IT staff aren't getting magically "promoted" into "higher value added positions" when their jobs are outsourced. Their actual job is leaving the country, and they're being laid off. Whether that's better or worse is a relative viewpoint. Regardless, there aren't any equal-paying (much less better-paying) jobs replacing them.

"
What about this doesn't make sense, when I was 14, I worked for a guy cutting lawns doing almost exactly this."

Yeah that's great, except you can't offshore outsource lawn mowing. Going offshore you can exploit a completely different tier of societies that aren't tied to the ecomonic regulations and expenses of the corporation's home country. You can't live on $3/day here in the States.

Now, we pay the N managers 60$ per hour, and the offshore guys $10 per hour, each. So the net cost is $90 per hour for 3 times as much work as one onshore guy at $50.

So, which company will succeed? Output of one man at $50 per hour, or output of three for $90 per hour?

There is a net benefit to society, the ex-programmer is making more money, and he's producing cheaper code. There's a net benefit to the offshore society, they are earning reasonable wages in context.

The loser, admittedly, is the competing on-shore programmer, who either has to drop his hourly rate to $30, or figure out how to become more productive, or go and find 3 dudes to write code for him. Any of those three is a viable strategy, I'd suggest option 2 is the least stressful and the most satisfying, since I don't enjoy management or poverty.

Tarriffs as an economic strategy are crap. If you try and save a non-competitive industry by way of tarriffs, you end up hurting everyone, to protect a segment of the economy that would find ways to adjust if it wasn't propped up. It comes down to a small segment of society bitching loud enough to politicians to get them to screw over everyone else, since the general population doesn't notice most of the time anyway. Tarriffs add nothing to the U.S. economy.

Take the tarriff on the steel indstry. It saves a dying industry, so that the workers do not need to try and find other jobs. But it makes cars more expensive, and hence makes domestic made automobiles less competitive, as well as forcing consumers to throw away extra money giving it to an industry which isn't able to produce enough value to cover it's cost.

People need to learn that having to change and adapt in order to survive is a fact of life.

Proponents (not perhaps without some justification, I suppose) argue that since no Americans want to pick strawberries or mow lawns for a living, without the illegal/legal migrant workers, the work will never get done.

"Free trade" proponents always say that. The truth is that Americans don't wan't to pick strawberries for the salaries the growers offer, because you simply cannot support a family in the US on those salaries. If the growers up the salaries, then Americans will do it, but that makes the price of strawberries go up. Then we'll just buy strawberries from Banana Republic where they're willing to work for $1/day and can actually support a family.

Those with the "have" are in a position to call the shots here. Or put another way, capitalism being tied to the private ownership of the means of production allows the private appropriation of surplus value. Companies outsource more for marginal benefits at best it seems, and yet nobody things to cut the salaries of the top executives?

You haven't been following the news lately. CEO salaries are out of control because of all the "good ol' boy" networks in these corporate compensation committees. Stockholders can't get rid of them because too much is held by insiders. Look how the effort to oust Eisner at Disney failed, and he's been paid insane salaries to run the company into the ground.

The problem is that CEO's and their ilk live in a totally separate reality from the rest of us, and have lost any sense of "social responsibility". And the last defense we have against the "aristocracy of wealth" is the estate tax, which the Bushies want to permanently abolish.

Also, there is a movie released in 2003 called The Corporation [imdb.com] which, as one of its premises, stated that if you consider the typical corporation as a person [wikipedia.org] and diagnose it using the Diagnostic and Statistical Manual of Mental Disorders, it would be a sociopath [wikipedia.org].

When there is the regular worm or virus that crushes windows, or the massive service pack that actually forces the need for more memory to be placed in the computer, or a larger hard drive all together, or a reformatting of the drive to fix the worm damage - outsourcing is a waste of money. Why? They, the help staff in India, is sitting there collecting money and producing no product(not helping)!

Friend, you're living in la-la land if you think any American executive thinks that long-te

The point is that the people whose jobs are outsourced are not competitive. Whether you like it or not, it IS a global economy and when somebody else will do your job for less money, employing you instead puts your employer in a disadvantageous position. The competition will exploit this and drive your employer out of the market. The effect is the same: You're out of a job.

The question is not if outsourcing creates more jobs than an isolated domestic economy would. The question is: Does outsourcing save the jobs which are hard to outsource? Pretending to be in a non-global economy would drive these jobs away too in the long run.

The point is that the people whose jobs are outsourced are not competitive.... when somebody else will do your job for less money, employing you instead puts your employer in a disadvantageous position.... The question is: Does outsourcing save the jobs which are hard to outsource? emphasis added.

I would like to disagree that the cost of employees alone isn't the driving factor. Others include the number of defects, quality of work, oversight, and responsiveness.

The point is that the people whose jobs are outsourced are not competitive. Whether you like it or not, it IS a global economy and when somebody else will do your job for less money, employing you instead puts your employer in a disadvantageous position. The competition will exploit this and drive your employer out of the market. The effect is the same: You're out of a job.

Yep. And the cheapest labor is that of a slave or prisoner who is being given barely enough to eat. Once you know that, you know that's exactly where the global job market is headed, as long as those countries that use slave/prison labor (China?) are allowed to participate in the competition.

That is why offshoring must be limited: the competition doesn't have to follow the same rules you do, and that inherently makes for a tilted playing field. The competition has no incentive to change their ways (they're more "competitive" than you, after all), so you're forced to adopt their ways. That means other countries that wish to compete in the global market must start making use of slave/prison labor, and that puts pressure on the governments to increase the size of their prison labor pool, which puts pressure on them to put more people in prison.

No, offshoring is acceptable only when the target countries have the same labor laws on the books that you have. Otherwise you may as well throw out 100+ years of economic and labor progress (what, you think the middle class just magically appeared? It came about as a direct result of sane labor laws, because the use of automation virtually guarantees that there is more human labor available than work to do).

Outsourcing also raises the amount of money third world countries have. As they get richer, they start buying more expensive luxuries made in the industrialized nations. In the end, it will help our economy.
Also, it is true that we do lose jobs to outsourcing. Like the article mentioned, however, we gain new skilled labor positions that are better paying than the manual labor positions that were eliminated.

One slight problem with that theory- we don't make anything in the United States anymore, we're a POST-industrialized nation. So while this will help China, what new skilled labor positions are we going to get here? Especially since any Indian can supposedly do any skilled labor position just as well as any American and for 10% cheaper under the H-1b regulations?

I'm also a patriot- we can't have people paid equally until we have one world government to manage it. And even then it will take a serious degragation of standard of living in the United States before it is achieved. Hmm- which may be the point of the whole exercise- to impoverish the United States so that we can be paid equally with people in China- Anybody willing to work for 24 cents an hour?

Prices aren't going to sink to the lowest. Nobody with the slightest comprehension of economics would suggest that. Prices will find some middle ground, rules of supply and demand.

Take the US and India for example. A US worker makes say $120K, the same worker in India might make $5K. Demand for the Indian labour will increase, therefore price will increase, vice versa in the US.

And it's true. Wages in the US/Canada tech sector aren't what they were 5 years. New grads aren't making $80K out school anymor

You realize that is false, right? Looking at a cross section of wages for the past 100 years in the US, wages have risen. They have even risen in the past 5 years. 100 years of manufacturing outsourcing, tech outsourcing, immigration, etc, etc, and wages still posted gains. I cannot find a single time in the past 100 years were the 10-year moving average for wages sank.

If you compare the middle class person of 1950 to someone at the 20-th percentile today (in other words, the

"Outsourcing also raises the amount of money third world countries have. As they get richer, they start buying more expensive luxuries made in the industrialized nations."

No they dont. They buy stuff made in India, China nad Taiwan.

"In the end, it will help our economy. Also, it is true that we do lose jobs to outsourcing. Like the article mentioned, however, we gain new skilled labor positions that are better paying than the manual labor positions that were eliminated."

But consider when industrialization became big in the 19th century (at least where I live). It was hell on the little people then. Mass unemployment and lots of suffering.

It was a good thing in the long run, though. The world is much better for it:
Infancy/child death rates where around 20-30% before industrialization. The rest of our quality of living has been raised similarly; to be able to study is half of life's meaning to me. Lots of people had brain damage because of bad harvests when they were children. Etc, etc.

This outsorcing trend will (almost) certainly be a Good Thing for the third world and all humanity in a few decades.

It just sucks to be us -- that has to live through the changes in the wrong place. Like the unemployed and workers of the early industrialization.

Well, you see, to use your keyboard, you place the right hand on the keyboard, and you place the left hand on the keyboard. Then, using the little keys on the keyboard (which have been conveniently coded) you code. With your hands.

I've been hearing more and more often about something similar. While not the same idea, it's the idea that America "recycles" (to be put in an Economists terms) jobs every year, something in the order of 50 million or so if I'm not mistaken, and that outsourcing somehow is just a natural process of this recycling...

If you ask me, I think Economists have it tougher than Computer Scientists, but that's just my opinion.:-P

You might think that economists study people, but what they tend to do is make blanket statements about economic forces that support their political views first and foremost - and then try to fabricate some 'scientific' reasoning to back it up.

The problem with economists is that they try to be real scientists, when they're not. They're social scientists. Social scientists should study trends and events, over a long period of time, and make assessments based on those trends. There is no trend that even remotely relates to the current outsourcing of IT, as there has never been a situation where a country has sent high-paid, high-education jobs overseas! At best, you might be able to use the "outsourcing" of the Roman Legions to the barbarian hordes as a similar situation. At best.

There is no evidence, circumstantial or otherwise, that outsoucing tech jobs is helping anyone but the richest in America. That alone should be evidence enough for you that outsourcing is bad.

EXACTLY!! Unfortunately, the only jobs they don't try to outsource are the executives ( honestly, they should try harder) and, those newly-freed up resources - usually cash - go into the bigwigs pockets in one of two ways.First, they get bigger raises, expense accounts, golden parachutes for reducing the company payroll. Second, the stock exchanges usually reward the newly productive company with an increase in share price, making those executive stock options more valuable.It's win-win if you have the key to the big boys' bathroom.

...and it appears valid at first bite. Ultimately the corporate motive is to make more profit however, so money saved by outsourcing probably wouldn't drain into more programmers (or whatever position abroad) more likely into the bottom line for the shareholders...not an entirely bad thing if you're a shareholder but if you're an employee...

OK, first of all, where is the evidence outsourcing jobs overseas makes anything cheaper?

Last time I checked the market set the price (with obvious unnamed monopoly exceptions *coughMicrosoftcough*). The price the company pays for the production of the item has negligable impact on price--and that's fine. The price people are willing to pay for something has a much bigger impact on the price. All outsourcing overseas does is fatten the profit margin for the sales of these IT projects. So right there, her basic premise is crap.

I mean, is she REALLY saying that companies will have more money to pay you with, because they don't have to pay you? WTF.

No, her basic premise is sound economics. What outsourcing really does is grow the economies of those other countries. The money going into those economies results in higher economic spending power among the outsourcees. They in turn buy more goods, which employs more people in their local economy. This causes economic growth... at the same time it provides the ability for people in these countries to start their own business, utilizing cheaper local professionals, to produce products and outcompete the American companies. That sounds scary... but the net gain is cheaper goods and services for US as well. This in turn enables all of us to have more spending power and allows OUR economy to grow as well. This creates more jobs.. etc.. etc..

It's the concept of competitive advantage. The workers in India have a competitive advantage as they can do the IT jobs cheaper, and ostensibly at or near the same quality level. By allowing them to take that advantage they win (their economy grows), but they also begin producing products that out-compete the more expensive American products. This is the exact same cycle we saw with Japanese cars (which has come full circle with those companies opening up manufacturing plants in the United States).

Economics is nothing more than a science of how to fuck over the working citizen and benefit the investor. Anytime I hear someone talk about "economics", I know they are either callow and ignorant or an evil greedhead. Guess which one I think you are....

you also wrote:

What outsourcing really does is grow the economies of those other countries.

WHo cares? America is my business. I own it jointly with all my fellow citizens. They are my partners. I

Stop calling assembly manufacturing please, some of the biggest FUD out there now. Use the correct terms. Picky point but it's true. We used to manufacture cars, now we do not, we put together car kits.

And how is it "all of us" when it's not "all of us" who can get these cheaper goods and services? Aren't you leaving out the ones displaced, out of work, rehired at less wages, etc? That means it's not "all" of us, correct? Seems like you are assuming two things at the same time, that outsourced jobs result in zero loss of jobs here, and that they make more jobs at the same time. Say whut? How are people who have now much less money or no money supposed to take advantage of just cheaper trinkets, when basic bills and utilities aren't even being met?

Sorry, it ain't working, been hearing this scam pushed for over 20 years now. Stuff in general costs more, and good well paying jobs are much harder to come by, you can't just pick and choose a few selected entries like CPU chips or something and call it the total economy. Got the personal memory, don't need an article to tell me that. Stuff costs more now, not less, generally speaking.Yes, there are new products on the market, but in general, nope, stuff costs more. Food, energy, housing,clothing, all costs more. People have lost purchaising power, not gained. Bankruptcies are at record levels-why if these games are making the economy so good? Why is that? Really, why? Savings at all time historic lows-why is that? if we are all so better off, wouldn't it be trivially easy to sock away more now? But it's not happening. House notes are now common at 30 years, I can remember when 10 was common. Why are they at 30 now, is it because houses cost more, or less? and yes, I even mean the same excact size houses in the same areas. And interest only loans? Excuse me? WTF is that noise? People are getting so desparate to hang onto their houses-just a place to live- they basically agree to rent them forever? That's simply...weird, but I'm seeing the ads now on Tv and such, never used to be that way. Car notes are at 60 months now, I remember 12 month loans, and any random middle of the road joe normal blue collar paycheck could pay them off to boot, let alone a white collar at 2x the average wage. And some people are being forced to a perpetual lease, they can never really own a car (that runs and ain't beat to snot) now, it's turned into an expected monthly utility bill because the lease is all that's affordable. I remember when leasing was extremely uncommon for joe sixpack, now they push those magic cheaper numbers because outright purchase is so hig-where's the cheaper cars at? I remember a ton of cars brand new at under 2 grand when I first started driving, where are they now?

Less people have jobs with full benefits now. More people have lost their primary jobs and have been forced to take lesser paying jobs with less or zero benefits, sometimes not even getting a full work week. They just screwed people over on overtime this week with that new law to boot. More households require two checks to function, when one used to cut it easily.

How is this "better"?

Nope, the US did well when we pushed a full, completely diverse, vertically integrated and protected economy, the whole magilla, manufacturing, agriculture, energy production, etc, all of the above. It went downhill when they pushed swapping the cow-working- for the magic beans of get rich quick "investing" in whoknowswhereistan and making millionaires into billionaires. The only servicing I am seeing is the US middle class getting "serviced" right up the tuchus by the same old slick snakeoil guys.

The better era with a better styled economy would have been the 50's to late 60's. Since then, coincidentaly with allowing dumping of autos and the start of offshoring,and allowing huge tariff imbalances, and also giving TAX BREAKS to offshore, we've gone steadily down hill. Just because we have some shinier stuff now doesn't mean we have a bette

I don't believe it reduces prices but it does delay some price increases. The market is pretty competitive across the board and pressures on this market prevent any real changes in the costs of most goods. So what is a company to do? Try to do the same for less. This allows some, not all, companies to be able to forgo raising their prices.

Of course its all a vicous circle. Eventually one of the companies succumbs to the fact it will have to raise prices... and they lose a little marketshare but it ev

Because we're all shareholders, remember? Except the 50% of the population that isn't, like those of us still trying to pay off the student loans we took to get us into white collar jobs and out of the dying manufacturing industry. We're the real suckers. Thousands invested in a future that was pulled out from underneath our feet.

Well, nice arguments and all. But fuck that. They can say all they want but before we stop paying multi-multi-millions to these greedy ass CEOs/CTOs and such, I don't want to listen to nothing. Do they have any answer to "If the CEO took a 50% pay cut, we could add another 2000 jobs in my company right now. So, why doesn't he?"

I guess I am just a little bitter but since they have announced 'massive' layoffs mid-sept, I can't do nothing but rant...

The.com bubble bursts, causing employees working for firms whose primary business is selling IT products to lose their jobs.

Bigger IT companies that didn't actually fold outsource some work to reduce expenses.

Due to public demand and reduced expenses, non-IT companies buy more computer crap.

Non-IT companies have to hire the old IT employees to run the new computers.

Net result: Those employees eventually have jobs in computers, just not with computer companies.

This actually makes sense, and I've seen it here locally. A lot of people I know who were laid off from startups are now working for their old customers. The problem is, this trend can take years. The number of businesses that totally went under put a ton of IT talent out of work. Compensating for that will take some time. That's not good news for the employees who haven't landed a job yet.

I keep hearing this argument made in favor of outsourcing jobs, but what I never hear is a realistic estimate of the amount of time that has to pass before the good stuff comes back our way. If there's a fairly quick turnaround on work returning to the country of origin then it's a good argument, but I suspect that the amount of time that has to elapse in order for the jobs to start coming back is more likely to be measured in decades than years.

But in those terms, protectionists are like the little boy in the parable, ensuring visible jobs for workers in protected industries at the cost of the invisible benefits that would come from being able to hire the lowest bidder.

However, can you explain how outsourcing is an example of the broken window parable?

Outsourcing is vandalism, like breaking glass, that ends up costing everyone. Caroline argues that outsourcing (dollars spent somewhere else) benefits everyone, including the programmer who's picking his nose and filling out resumes instead of being paid for the same work. It is clear that the programmer would differ. The programmer would also argue that the outsourced work is inferior in quality and that he's not allowed to compete effectively due to further government vandalism though insane IP laws. The supposed work that's created is click and drool upkeep of Winblows, which pays very poorly, while others do the brain work. Everyone pays the price for this, if they are not sensible enough to use free software, by paying monopoly fees for software that could and does cost much less. These hidden costs are carried by all in the form of higher general costs lower efficiency and inconvenience. The situation with non free software is much closer to the case of the boy who's paid by the glazier to break windows. That's what the upgrade train is.

From 1999 to 2002 (last available data), the number of "programming" jobs in the U.S. earning on average $64,000 fell by some 71,000. But jobs held by application and system software engineers earning on average $74,000 increased by 115,000. Thus, even as it increases the number of IT jobs, global sourcing of software and services changes the nature of IT jobs, moving them up the skills ladder and diffusing them throughout the U.S. economy.

First, basing conclusions on an incomplete dataset is foolhardy. The quoted numbers do not capture the complete status of affairs. Much work in IT is done via contract/consultancy and those job losses arn't reflected in the numbers listed. If Fortune 500 companies replace domestic consultants with those working for offshore vendors, it really won't register in those quoted statistics. But it's been happening on a grand scale - as I type this, I am surrounded by ~500 offshore visa workers.

Numbers aside, there is a larger theme that Ms. Mann and others of her ilk neglect - if lower end "grunt" positions are being snuffed out in lieu of higher, "up the skills ladder" posts, then shortly, in a few years, both ends will inevitably be filled in such capacity. Where, pray tell, do qualified IT "engineers" earn the experience and prove their mettle? By toiling on systems bottom-up and then gaining an appreciation and understanding of complex system underpinnings. Or am I to understand that these ranks are now to be filled entirely by MBAs and sociology majors? Young folks are choosing alternate career paths, heeding the alarms that the parents and older friends send their way.

I am a programmer, I make my money from making programs. I expect to get paid very well for what I do. I have spent thousands of dollars in not only college expenses, but also other training and materials. If x number of programming jobs are exported to another country because U.S. coorporations don't want to pay what I expect how does that benifit me the programmer? The economy as a whole 'may' not be hurt, but actually helped, but in the end there are less programming jobs out there than if there weren't outsourcing programming jobs. The big picture doesn't make me feel better.

I'm sorry, in the short term it might not benefit you as the programmer. But you were the one that chose to do programming and because of your choice, you have to face the fact that thousands of people overseas whose families earn 1/10th of your income also need to eat. They'll be asking the question how come they can do similar work as you and me and are willing to be paid 1/5 to 1/10th of what people in the US earn, but they shouldn't get the jobs?

Well, slow down a little -- the world doesn't owe you anything because you made all that effort. Whether it's fair or not, it's up to each of us to find a way to be valuable to a company.

If they export our jobs, they'll get what they pay for (and usually do -- witness the failure that is outsourcing).

The only bad part of that situation is that it takes CEOs and boards a few years to figure out that they're not getting what they pay for when they outsource (shoddy code, slow response time, lack of understanding of American business, ad nauseum).

The reason outsourcing fails is that you can't easily just cut off one part of an organization and throw it across the world. To make that really work, you'd need to move the entire organization to that country -- and now you've just outsourced everyone except the board. Oops.

Become a security guard for rich people.Build trust over a decade or so.When the upcoming collapse is in full swing, abuse that trust by handing the boss over to the tar-n-feathers brigade.Ya gotta think long term.

It's basic economics. What is described is how it works in theory. However, the theory requires perfect knowledge for all parties involved, zero costs for movement of capital (human and otherwise). I'm also unsure how comparative advantage [google.com] (Google and David Ricardo are your friends) works in a market that is essentially saturated.

Perhaps the thing that really needs to be looked at is that IT support is viewed as a commodity. Support offered in India or Russia is viewed as the same quality product as that offered in the US. If this is the case, quitcherbitchin. I doubt you are buy American in other walks of life. If there is a difference in quality, it's time to express that. Was it Dell who found that their business customers wanted US tech support instead of Indian tech support? (or HP?) The product wasn't a commodity, so it couldn't be switched.

Rather than gripe about losing your job, explain why it's better that you have it than someone in another hemisphere.

And if you made it this far, here's a link to a non unreadable article [slashdot.org]. Will Taco et al. ever admit they are wrong with this color choice?

is that economics is a zero-sum game. Lower costs supposedly means more profit to executives, but no increase in jobs. Higher overall demand supposedly means higher demand for outsourced workers.

What the author is trying to point out is that whole new markets of opportunity will open once the cost of basic programming activities is low enough. One of the benefits of open source software is that poorer countries can now obtain technology that before was out of their reach (or they can at least extract higher discounts from proprietary vendors).

I have a friend who works as a software consultant customizing proprietary accounting software for small/medium enterprises like those described by the author. That's the basic outline of the future -- smaller companies could benefit from technology that goes beyond office applications, but to more backroom ops, or e-commerce opportunities, or whatever. You won't get paid based on your ability to write something that can be written cheaply overseas to target a generic problem -- you'll be paid to tweak that piece into something that gives a competitive advantage to your customer... or you'll be paid to integrate that piece with other pieces that can be picked up cheap as open source software or as cheaply developed components.

Many industries assemble cheaper components into an overall design that delivers a value greater than the cost of the parts. Software, as an intangible good, provides some interesting (perhaps worrying?) differences that make economic analogies a little tricker to apply.

But I think while some components are open to a research/science approach (algorithms, maybe frameworks) I think the majority of software is close to manufactured goods in that customer requirements drive a solution that isn't generically applicable or saleable (a problem for Microsoft-ish companies that try to sell the same thing to everybody). The world of de facto standard products gets a lot of press because it's typically winner-take-all (google, MS Office, MS IE), but the growth in demand and in jobs will be in the world of tweaked software.

You still can anytime you want, from the comfort of your own home. [phoneactress.com] I know someone that did it and she made pretty good money doing so (about $15/hour, I think). When I inquired about male employment she said they do hire men, but that most callers for men are gay, so men have to be prepared to do the gay thing (at least on the phone) if they want to work a phone sex line.

Don't kid yourself, though... it's work. In order to make the highest pay rate you have to pretty consistently satisfy the clients and

I kinda have to disagree with all of that. Current trends is not that business uses the money it saves to buy new stuff, it's that the money they save, they tend to apply to top executive bonuses and salaries. The trickle stops at the top, generally speaking.

I just love it when you IT people get all pompous about economists. Of course you're all the smartest people on the face of the earth, so people who've actually STUDIED economics can't possibly be right about anything, especially when you disagree with it on a visceral level.

You guys sound as pathetic as the steel workers and miners where I grew up, compaining about how the corporate "man" keeps you down. Get with the times: many IT people were the first to say that to the "old economy" manufacturing employees back when getting an IT degree meant a paycheck that was completely outsized compared to your actual skills.

Now that you're not making mad money right out of college, you're all more than willing to join up with the Union and be protectionists.

It's a known economic fact that lower labor costs translate to lower finished goods costs. You think you'd be able to afford the latest graphics hardware and a new box everytime the next killer FPS came out if they weren't being manufactured overseas for way less than they could be made in the U.S.? You all benefit from outsourcing and globalization, but you're too fixated on your own careers to see the benefits.

"The power of big business over our national life has never been greater. Never have there been fewer business leaders willing to commit to the national interest over the selfish interest, to the good of the company over that of the company's they head."

See also:
http://www.pbs.org/now/transcript/transcript334_fu ll.html

DOBBS: I want to hear one of these candidates sharply and clearly say this country is about the people who live in it.

...

DOBBS: You have a responsibility not only to your investors, you have a responsibility to the marketplace, you have a responsibility to your customers, to the community in which you work. You have a responsibility to the country that makes your business possible in the first place.

MOYERS: Heresy. Are you a traitor to your class? The investor class.

DOBBS: Well, I'm, you know, I think most of us are investors. And I hardly think I'm a traitor. I think it's traitorous and treasonous and absolutely ignorant for these people to be out ballyhooing double-digit returns on equities when first we have to get our house in order in this country. And bring back integrity, principle, leadership to our business enterprises, to our markets. And try to do a lot better for the people who count. That is the middle class.

...

MOYERS: You begin with a stunning quote. I'll read it. Quote, "The 20th century has been characterized by three developments of great political importance: the growth of democracy, the growth of corporate power and the growth of corporate propaganda as a means of protecting corporate power against democracy."

DOBBS: Absolutely. Corporate America has at this time controls the national media. It controls nearly every avenue of an American citizen's access to information about the way he or she lives, about those forces that are influencing our lives.

And corporate America is protected in Washington by the dollars it spends. It is protected in the media by some virtue of ownership.

I have no sympathy for people who want government to distort economics.

Well, considering that economics is poorly-understood to start with, I find it hard to imagine how governments can distort economics worse than corporations distort economics.

The "free market" concept which is so prevalent among libertarians and corporatists is based upon an ideal model, in which everyone in the model is a free agent. Unfortunately, that's not a true model.

In the corporate model, a select few in charge get to make up the wages paid. Now, this is somewhat constrained by the market availability, but as we discovered with outsourcing, there is no lack of people willing to work at pretty much anything, for almost nothing (comparatively speaking). Meanwhile, those who fix the game (upper management) ensure their own positions are not outsourced, while paying very little to everyone else.

Meanwhile, those with the money are able to influence government policy to a much greater degree than those without much money. This also shifts the balance of power just a little more to those running corporations. Whether the DMCA, the INDUCE act, or the consolidation of giant media, the individual loses out, while the corporations gain.

Economics in the US is warped. There is no such thing as a free market. Nor is there any indication that the free market is a good model to start with, let alone the best model. The only thing we've discovered so far is that empirically is better than fuedalism, socialism, monocracies (including monarchies, dictatorships, etc), hegemonies, and bozocracies (in which clowns run the show, like in the US).

People can't easily switch careers. I have a familyto feed, so I can't just go back to school. I mademy investment in education. Somebody going into ITtoday would be stupid of course, but some of usstarted long ago. We're stuck. I need to keep thiscareer until I die.

The feds muck with interest rates all the time.Sometimes they break up monopolies. They dish outartificial monopolies to your local phone company,patent holders, copyright holders, TV stations,and so on. Market distortion is the norm.

Bitch and moan as we may, this ridiculous imbalance in world wealth doesn't look very stable to me. Outsourcing this kind of stuff had to happen.

There are masses of very poor people out there now able to afford a computer and internet access. Their disadvantages are many, their only advantage is that they're poor. So of course they will work for less. Suck-it-up dept is right.

I don't support the exploitation of workers in poor countries, but it's hardly exploitation if these people are making a living doing what they do.

I'll give credit to our dear analyst for actually trying to reason thru why offshoring everything in sight is a good thing, rather than just waving her hands. However, this just makes it clearer than she's full of shit.

Example #1:Design and interface must be done together with the customer, but coding and maintenance do not require close proximity with customers and can be done by less costly programmers abroad. The higher-wage jobs, involving design and interface, must still be performed in the U.S.

Good try, but wrong. There are times when the designer and the coding monkey can be safely separated, but in general you're asking for trouble. Prepare to be IMing a lot. The offshore outfits are becoming better designers in any case, and soon the US designer's employer is going to be shipping his/her job out to be where the code is written.

Example #2:The value to the U.S. economy of cheaper outsourced software and IT services is that it reduces the price of customized software. Econometric estimates are that, to an even greater degree than IT hardware, demand for software and services increases more than one-for-one with reductions in price. Therefore, as prices fall, demand for services and software rises more than one-for-one, diffusing IT into the lagging sectors and deepening the use of IT in the leading sectors, thus increasing demand for workers with IT skills in all sectors.

So with cheap custom software, more businesses will use it and the user employees become computer skilled. The first assumption I'll buy into, assuming that an easy and cheap local consultant is available at the start of the coding chain. If this plays out to the scale she thinks, therein lies the benefit to US IT workers. The second assumption is complete crap. Someone using a customized Access database front end is no more "computer literate" than someone using Word, all else being equal.

Example #3:Meanwhile, U.S. IT jobs continue to move up the IT skills ladder. Demand increases for workers with the skills needed to design, customize, and utilize IT applications...

Nope. This assumes the US always holds the high ground. However, as more development and design occurs overseas, and the host countries become ever more developed and self-sufficient, this falls apart. They sell to us, and by and large don't need anything back... except our increasingly worthless dollars.

She's got an interesting argument: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in the US. Ummm, did you follow that?"

Yeah, I follow that arguement...all the way to the unemployment line.

First, all tech is crap. Let me repeat that. Our careers are based on crap. First, for any non-tech company, computers are a support accounting item. This means that computers are not in the business of making money for the company, they are an expense. (Get over it, I'm not done yet, so hold the flames til you see where I'm going.)

Let's look at the grocery store. It's full of tech in my area. PCs on the check out lines. PCs to weigh and print tickets for fruit and veggies, computers to check the temps in the coolers, computers to do the accounting, timeclocks that are really T104 form factor motherboards with full computers, hell, almost every isle has a computer. (I understand that some stores are replacing the security camera VCRs with computers now.)

Second, when these devices are first installed, there is some sort of cost/benifit study, both before and after they buy it. (If they are a cluefull company. Uncluefull don't do them, simi-clued do one before. Only fully clued do both.)

Third, after a few years, these productivity gaining devices stop being seen as something that saved them money, but just another expense. They forget they replaced things that cost even more, or the savings they got from installing them.

Now comes the down cycle (remember when all the wall street anaylists said we beat the down cycle markets? Cheap talk, and while I never believed it, many did.) and busineses have to cut expenses.

Gee, where do we cut? Almost always the answer is IT, because IT is seen as an expense. They almost always forget the productivity gains they get from the use of technology, they only see that line item cost IT people are on the balance sheet.

As for tech companies, very clued know that IT keeps the plates spinning and productivity high. They may cut a few in IT, but mostly by quietly asking "who are the bottom 10% we can do without best?" and those hit the bricks.

Simiclued tech companies just cut the last hired.

Unclued cut a lot of IT, regardless of why.

Likewise, consertives say "outsourcing is GOOD for jobs!". Look at thier reasoning, folks. If you believe it, then outsourcing is good all the way up the chain of command, yet you don't see CFOs and CEOs being outsourced. Oh, no! What you do see is that they get multi-million dollar bonuses and raises for cutting 2,000 jobs here, 5,000 there.

This is why I say IT workers are the modern black gang of the world. We stoke the boilers, fire the engines, make the computers run. But are we asked our opinions on all the jimcrack geegaws PHBs demand? Hell no! Most of the time we are accused of "slacking off", "being uncooperative", "geeks" with a roll of the eyes and shake of the head, and the only respect we get is when we save their ass and the empty mouthings of praise during those "all hands" meetings where the bosses give each other awards.

(OK, so I'm bitter right now. I'm miffed because I just came from one of those all hands meetings, and it was a complete waste of THREE FREAKIN' HOURS.)

But let the pager go off at two in the morning, and we are there. Someone has spyware on their system? We are there. Virus? Ditto, gritting our teeth all the while they regale us with how smart they are about technology or how absolutely they can't do a thing with a computer. Thinking how this person makes twice what I do, with an IQ measured in irrational numbers....

But what really gets me is the number of times when the very people that depend on IT to get their computers working bypass IT, and go spec out and order servers and software and then expect us to keep it running, or second guess us the rare times we are asked our opinion.

Once all the IT jobs are outsourced, it will only be a matter of time before the Indians decide they don't need the American companies to tell them what to do, and can just send over some Indians on L-1 visas to interface with *their* customers.

The problem with outsourcing is that it isn't a buisness move that creates growth. You remove a job here and create it over there. Profit is generated but no real change has happened so there is little modivation to create new jobs.

Yes its true the new job over there creates higher standard of living and wealth over there but at the cost of the standard of living and wealth over here you really haven't gained anything but CEOs with larger wallets.

Call me a troll, fine... but it seems to me that most of the responses of negativity towards the article is with the reasoning, "I'm not employed, so therefore IT jobs arent being created."

However, I must say, as I am currently looking for alternate employment, I have had several opprotunities for job interviews (about 10). And these jobs range from technical support at 30k/yr through Sr Network Engineer and Security Analysts at 100k/yr and more.

The jobs are out there, people... however (here's the troll) whether you're qualified for them is another thing altogether. Whether you want to be a tech support guy is yet another... It also depends on where you live (I happen to live in the NYC area and there are plenty of IT jobs around). Yes, my current company is outsourcing to India, but we're still hiring IT people... just not the same group of IT people.

Oh and one other thing... most of the people that were laid off here in the US due to my company's outsourcing have been Indians who are here on work visas.... so if you're going to get the same people at 1/2 the price because they are 6000 miles away, then why wouldn't a company do that?

Also, I knew a lot of Chinese folks who wanted to get their educations overseas.

For the moment, at least, the west has a good lead in terms of R&D and education.

Of course, we'd be more competitive if we copied China's lead and forced some farmers to produce food for our country for near-slave wages.... I suppose we could just our crops from south of the border, though. Right?

This all seems to be pretty simple to me, and fits into "the big picture" quite firmly.

From 1999 to 2002 (last available data), the number of "programming" jobs in the U.S. earning on average $64,000 fell by some 71,000. But jobs held by application and system software engineers earning on average $74,000 increased by 115,000.

So, programmers overseas are now writing the programs that businesses depend on, and we're hiring more people (44,000 more people in 3 years) to try to implement / support that software. Makes sense to me.

There's been lots of discussion on/. about how overseas programmers are less "in tune" with the business problems that the software is to provide the solution for, and how in some cases the programmers are not as well-trained.

Therefore, it should be no suprise that it takes that much more work(ers) to crowbar this software into place & pound it into submission so that it does the job, and to keep it doing so every day. Additionally, when you consider that the personnel doing the implementation/support are that much further disconnected (language barriers & such) from those who actually built it, this becomes a no-brainer.

The real question is, is the trend of software requiring more and more maintenance & support year after year for myriad reasons a good thing? This article claims that it is in the short-term (more jobs), but what about when the whole card house tumbles?

Catherine Mann, from the Institute for International Economics, has a look at What Global Outsourcing Means for U.S. IT Workers up over at Queue. She's got an interesting argument: outsourcing means cheaper IT products, meaning businesses will buy more, meaning more products to make & manage = net gain of IT jobs in the US.

An economist. Lovely. International economist, actually. Have those people *ever* been right about anything?

The amazing thing is that people think they can be right about anything but the most basic. Economics is at least as complex as the weather, which we know we get wrong much of the time, except with all the added predictability of being a social science...

The amazing thing is that people think they can be right about anything but the most basic. Economics is at least as complex as the weather, which we know we get wrong much of the time, except with all the added predictability of being a social science...

This is actually a much better metaphor than it appears.

Economics is a lot like meteorology. Meteorology is far from random...it's very, very complex, and it's often easy to look back and say 'this is why that happened.' You can come up with general principles...how certain things are likely to interact. And then you go to apply it...and you're still wrong 60% (number pulled out of my ass) of the time. Does that mean that meteorology is complete junk and worthless, and that all those principles they found were completely wrong? No, it just means that the influencing factors are so numerous that it's hard to make a solid prediction.

Is economics perfect? Of course not, especially when it comes to trying to influence change on a major economy. But that doesn't make it worthless. That just means that it's damn hard to make a prediction about how any system that complex is going to behave.

That said, most slashdotters would be well-served by pulling their heads out of their asses, and actually learning something about business and economics before shooting their mouths off about it. (??? PROFIT! HAHA THOSE BUSINESS GUYS ARE SO DUMB) The article is really, really basic market economics. Just laughing at it and declaring it bullshit without understanding it is about equivilent to if an MBA started arguing with a compsci guy about how all the computers in a company should be running some flavor of Windows because 'so many people run it, it must be the best, right?' It just reveals him as a retard when it comes to computers, just like the sort of reactions I'm seeing in this article reveal the average slashdotter to be a retard when it comes to economics.